CHARLESTON, W.Va. — The Christmas shopping season did not produce the revenue predicted in the state’s Consumer Sales Tax resulting in the state missing revenue collection estimates in January by $18 million.
The January drop put the collection hole at $116 million after seven months of the current fiscal year.
The sales tax brought in $26.4 million less than the state thought it would in December. During a conference call Friday, state Deputy Revenue Secretary Mark Muchow said a number of factors contributed to the drop.
“There’s a lot more e-commerce these days (in Christmas shopping) than there has been in the past. Certain type of goods, building materials, have fallen in price,” Muchow said.
New state Revenue Secretary Dave Hardy didn’t rule out further budget cuts in the current spending plan to try and make up the $116 million hole. He also predicted cuts in Gov. Jim Justice’s proposed budget for next fiscal year that will be unveiled next week.
“There will be cuts in the governor’s proposed budget,” Hardy said. “I’m not prepared to say at this time the number or the specifics because it’s still a work in progress.”
Hardy continued.
“The governor has a solid plan. It’s not one thing, two things, but a number of things. It won’t be a quick fix,” he said.
The severance tax for January finished $7.2 million above estimates showing some modest growth in the coal and gas industries.
The rate of missing revenue estimates has started to slow. The first three months of the fiscal year collections missed estimates by $81 million while the last four months the shortfall has been a combined $35 million.